Glencore ups payout in solicitation for Viterra 6.406% unsecured notes

By Jennifer Chiou

New York, July 26 - Glencore International plc announced in a news release that it is making its "best and final" offer in the consent solicitation for Viterra Inc.'s C$200 million of 6.406% senior notes due Feb. 16, 2021.

As stated, the company needs to receive consents from holders of at least 66 2/3% of the 6.406% notes.

The company will now pay a fee of C$12.50 per C$1,000 principal amount of 6.406% notes, up from C$5.00, if the amendments to the notes are passed. Glencore stated that it will not pay any make-whole premium.

The company is also soliciting proxies in connection with a meeting of the holders of the notes that has been adjourned to 10 a.m. ET on July 30. The original meeting date was one week prior.

On July 20, the company announced that it received consents for $369,055,000 principal amount, or 92.26%, of Viterra's $400 million of 5.95% senior notes due Aug. 1, 2020, enough to amend the notes.

The company needed to receive consents from holders of a majority of the notes and will pay $5.00 per $1,000 principal amount of 5.95% notes.

The proposed amendments will become effective when the remaining conditions to the offer have been satisfied or waived.

Glencore said on July 9 that it was soliciting consents to amend the two series of Viterra notes in connection with its planned acquisition of all of the company's shares.

The amendments will also provide a guarantee from each of Glencore and its main operating subsidiary, Glencore International AG, for the notes as of the effective date of the supplemental indenture.

Amendment details

Glencore requested that Viterra complete the acquisition asset transfers in order to facilitate the integration of Viterra following its acquisition and to allow the integrated company greater flexibility in operations, according to a prior release.

The amendments would also approve the acquisition asset transfers and align the reporting requirements under the notes with Glencore's public reporting requirements.

The primary effects of the amendments would be the following:

• Approve the change of the jurisdiction of incorporation of Viterra to Australia (planned to be the state of Victoria);

• Approve the transfer by Viterra, directly and indirectly, of up to all or substantially all of its assets and liabilities to a number of direct or indirect wholly owned subsidiaries in connection with the acquisition of Viterra by Glencore;

• Amend the financial reporting requirements under each of the indentures so that Viterra may provide only those financial statements that Viterra is required to file on Sedar;

• Modify the provisions of the existing negative pledge of Viterra under each of the indentures to make them consistent with the provisions of the negative pledge to which each of Glencore and GIAG is subject in connection with Glencore's euro medium-term note program;

• Eliminate in the indenture 6.406% notes restrictions on related party transactions; and

• Provide for certain consequential amendments.

Morgan Stanley & Co. LLC (800 624-1808 or 212 761-1057, attn.: liability management) is the solicitation agent for the 5.95% notes. The information and tabulation agent for those notes is Global Bondholder Services Corp. (attn: corporate actions, 866 612-1500, banks and brokers call 212 430-3774, fax 212 430-3775/3779 and confirmation 212 430-3774).

TD Securities Inc. (416 982-2243) is the solicitation agent for the 6.406% notes. The information and tabulation agent for those notes is Canadian Stock Transfer Co. Inc. (800 387-0825, 416 682-3860 or fax 514 985-8853).

Based in Baar, Switzerland, Glencore is a supplier of commodities and raw materials to industrial consumers. Viterra provides premium quality ingredients to leading global food manufacturers and is based in Regina, Sask.

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